Legal Definitions - in-kind

The term in-kind refers to providing or receiving something in the form of goods, services, or property, rather than monetary payment. It signifies an exchange or distribution where the value is delivered through non-cash assets or actions.

Here are some examples to illustrate the concept of "in-kind":

• Estate Planning: A will specifies that a deceased artist's extensive collection of art supplies and studio equipment should be given directly to their aspiring artist niece, rather than being sold and the niece receiving the cash proceeds. This ensures the niece receives the tangible items that hold sentimental and practical value for her artistic pursuits.

  This is an in-kind distribution because the niece receives specific physical property (art supplies and equipment) instead of the monetary equivalent from their sale.

• Charitable Contributions: A local bakery donates 50 loaves of bread each week to a homeless shelter, rather than giving a cash donation. The shelter uses the bread to provide meals for its residents.

  This is an in-kind donation because the bakery provides goods (bread) directly to the charity, which has a clear monetary value but is not a transfer of money itself.

• Business Transactions: A small tech startup needs new office furniture but has limited cash flow. A furniture supplier agrees to provide the startup with desks and chairs in exchange for a significant equity stake in the startup, rather than a cash payment for the furniture.

  This represents an in-kind exchange because the furniture supplier receives ownership in the company (an asset) as compensation for the goods provided, instead of a direct cash payment.